Vodafone battles Ofcom over 'confusing' price hike proposals

Vodafone has waded into battle with its regulator, Ofcom, over proposals to
make it easier for customers to walk away from contracts if telecoms
operators increase the cost of calls.

Vodafone said Ofcom's proposals risked "confusing" customers, and could end up “increasing the cost of getting a mobile phone contract for millions of people” rather than driving it downwards.Photo: ALAMY

The mobile giant said that, instead of making things simpler for consumers, telecoms companies could end up introducing a “bewildering” array of different tariffs for calls because of the proposed changes, sparking “significant confusion”. It could also make calls more expensive for consumers, the company added.

Ofcom said on Thursday that customers could be allowed to walk away from mobile phone, internet or home phone contracts early, if companies imposed price hikes before their supposedly “fixed” deals came to an end.

The proposals, which are subject to consultation, are designed to protect consumers after telecoms operators including Vodafone, Orange, O2 and BT angered users by raising prices. Ofcom has been flooded with complaints from users who did not realise that the small print in their contracts allowed the companies to do this. Ofcom said it had considered banning mid-contract price rises, but that it thought this course of action would breach European law.

Vodafone was quick to lambast the proposals, claiming that they could end up “increasing the cost of getting a mobile phone contract for millions of people” rather than driving it downwards.

It also dismissed the notion of a ban on mid-contract price hikes, saying it was unfair to expect mobile companies to “swallow” price rises that were often beyond their control. “We simply do not control many of the charges faced by consumers. They are set by third parties and mobile phone companies have to pass those costs on,” it said.

Most operators wholesale broadband and landline capacity from BT, or face charges for connecting to premium rate numbers. Profits at mobile companies have also come under pressure from regulations limiting the amount they can charge each other for handling calls from rivals.